New research from RAND Europe explores how life in the Armed Forces shapes the financial stability of military families

A new study (Examining the financial stability of UK military families) from RAND Europe, with support from the Army Families Federation, shows that military Service presents unique financial benefits as well as stressors that have negative impacts on a family’s financial stability. The study also shows a mixed picture of how financially stable military families perceive themselves to be. While military personnel and their partners have generally positive views about their levels of income, many families think they have insufficient capacity and resources to recover from unexpected financial shocks.

Although financial stability is linked closely to other aspects of a family’s wellbeing, there has been little research in the UK and internationally on the financial stability of military populations. The research that exists has focused predominantly on the financial wellbeing of serving Armed Forces personnel, presenting varying accounts of how the military compares to wider civilian society when it comes to finances. For example, while military personnel are believed to have higher incomes than comparable civilian occupations, they exhibit a higher risk of incurring financial debt. Unique characteristics of life in the Armed Forces, such as high levels of geographic mobility, can also affect the financial standing of the wider family in addition to the Serviceperson. Opportunities for partner employment could be constrained, for example, making a family reliant on a single income.

The RAND Europe study explored three issues. Firstly, what were the perceived levels of financial stability among military personnel and their partners; secondly, what factors did personnel and their partners see as positively and negatively affecting their financial stability; and thirdly, what finance-related support exists for military families in the UK and what are the strengths and limitations of this support. The study was based on a survey of serving personnel and their partners, as well as interviews and a workshop with stakeholders.

The study findings included the following: 

• Many families have seen their financial stability decrease since the COVID-19 pandemic. In the study survey, close to 57 percent of personnel and their partners indicated that their financial stability had decreased or significantly decreased since the pandemic and associated challenges for partner employment.
• Stakeholders generally believe that the Armed Forces Offer (i.e., the collection of financial and non-financial rewards associated with military service) has significant strengths in comparison to civilian compensation. The survey indicated that personnel and their partners see access to subsidised housing, the Armed Forces pension, operational and non-operational allowances, basic pay, and healthcare provision for Service personnel as those aspects of the Offer  linked most positively to financial stability.
• Despite the perceived strengths of the Offer, several elements of Service life are seen as negatively impacting family financial stability. The most salient factors are limited partner employment and career development opportunities, childcare accessibility and affordability, out-of-pocket expenses associated with separation and frequent relocation, and challenges families face in planning financially for the future. There is also a sense among personnel and their partners that the value of the Offer overall is eroding in comparison to civilian pay and the demands of Service life increasingly outweigh the benefits embedded in the Offer.
• Significant finance-related support exists in the UK to help mitigate financial risk for military families. The study found that this support takes three broad forms: support that focuses on financial behaviours (e.g., financial management advice), direct financial support (e.g., welfare and hardship grants), and support that is indirectly linked to financial wellbeing (e.g., housing and employment support). Despite the breadth of support available, there are some challenges and limitations to be addressed in the future, including coordination between support providers, consistent sign-posting, and improving how information about available support is shared among the community.

The study made 14 recommendations for the Ministry of Defence, the Armed Forces, the charity sector, and other organisations that provide finance-related support to the UK Armed Forces Community. The recommendations were centred on:

• Strengthening the overarching approach to enabling and sustaining the financial stability of military families (e.g., through fostering the inclusion of military partners in all aspects of policy and support relating to the financial stability of Service personnel).
• Building a comprehensive offer of financial literacy education for Serving personnel as part of the holistic transition policy and ensuring that relevant resources are accessible to military partners.
• Improving how information pertinent to financial management is provided and communicated to military families, including through ensuring the accessibility of information formats and language.
• Addressing barriers to accessing support and help-seeking (e.g., through ensuring consistency of information-sharing and support pathways across Defence).

As the study focused on an initial exploration of financial wellbeing issues from a family perspective, it also identified several high-priority avenues for further research. These are:

• Providing a better understanding of ex-Service personnel’s financial stability and the financial aspects of military-to-civilian transition;
• Exploring the similarities and differences in levels of financial literacy and experiences of financial stress between the Armed Forces Community and the civilian population;
• Understanding the experiences, support needs, and accessibility of support among families stationed overseas; and
• Building a better evidence base around childcare accessibility and affordability among the Armed Forces population, particularly with respect to how families navigate decisions concerning childcare and partner employment.

If you or someone close to you is struggling with financial issues, Veterans Gateway have collated various financial assistance resources for Service and Ex-Service personnel and their families here

Thank you to Linda Slapakova for writing this spotlight article outlining an important study on the financial stability in military families.